After Axact

By Haseeb Akhtar

axact

Pakistan is again in the global spotlight. The terror cells and public sector corruption have taken a backseat to an elegant corporate scam conning thousands of people out of millions of dollars annually. Axact, a Karachi based company with a shiny building radiating authenticity, has been accused multiple times of operating a network of sham degree-mill universities. One of them, “Columbiana University,” uses a coincidentally similar name to one of the most well-known institutions in the world, Columbia. On a website that looks like it was built by a Matric computer science student, prospective clients are hammered with depictions of accreditation.

When entrepreneurs inside Pakistan are faced with low-margin commoditized enterprise and aren’t given the necessary infrastructure to innovate, taking shortcuts to success becomes a norm. Instead of gaining ground globally through creating and exploiting new markets, they are delegated to fight over the same ones. Most businesses in Pakistan are in fragmented industries: buying from the same suppliers, selling to the same customers at the same price point with little to no innovation or change compared to their competitors.

Our global presence has become infiltrated with that mentality. We compete on small margins on commoditized goods in fragmented industries, competing with Bangladesh in cheap textiles, India, the Philippines and Mexico in mangoes, and a plethora of nations in raw cotton.

The scamming problem stems from a more general one: a lack of innovation and failure of Pakistani business to own a high value added export niche. Consider that the most successful countries and regions are known in the global market for a specific activity they do better than anyone else: Germany is known for its high margin mechanical equipment industry, Switzerland for its banking and China for its cheap manufacturing.

This is not a cry for Pakistan to wander into luxury cars, banking or cell phone rip-offs. The most successful countries have been those that deviated from established rules and industries. The most economically prosperous nations have evaluated their resources and become the best at harnessing them to suit current market needs, creating global brands that span generations.

The conclusion quickly presents itself. Pakistan must innovate and brand itself in an industry that it already has the tools to own. Entrepreneurs must have global perspectives, and instead of solely being businessmen, they must be agents of change.

Why have we not done this? When the word “export” is said in Pakistan, pictures of rice, cotton, mangoes and other crops come to mind. Agricultural products are undoubtedly our largest and most well-known export. The looming problem with these goods is that, in an example of cotton, our yields are low and less technological growing results in higher costs. This gives us little to no margin and makes us uncompetitive in a slit-throat industry where margins are already fractions of a percent.
So how can we do this? This problem of uncompetitiveness might just be our magic key. My generation of millennials in the West is starting to seek out organizations that provide sustainable socially and environmentally ethical products. They are ready to pay a premium for them, and quickly become loyal customers of brands that do this.

Pakistan is uncompetitive because of a lack of technology and large farming corporations, in a world where goods marketed as produced by small farmers are becoming valuable. Pakistan already has the infrastructure to provide organic chicken to the world, as desi chickens run wild through every village.

Pakistan has the best mangoes in the world, but are they marketed as such? No, they are sold in the commodity markets along with the fruit of countries that unsustainable producers can flood, thus manipulating low prices. These are not the markets we will be successful in; they are not the ones that we want.

The government and entrepreneurs of Pakistan must work in unison towards a cohesive vision that this country will be the most well-known producer of sustainably produced agro-products in the world, as it is the niche that suits us the most. Until we do this, we will be exporters of low-quality clothing products bought in Wal-Mart, college degrees bought off the internet and our public funds being sent to Switzerland.

 

The author is a social entrepreneur dividing time between between Baltimore and Bahawalpur.